The First 5 Steps of Home Buying
Maybe you are tired of paying rent and are thinking about purchasing a home as an investment. Or maybe you and your significant other have decided to take the leap into home ownership together. Whatever your case may be, purchasing a home is a very exciting endeavor. Congratulations!
Buying your first home can be a very rewarding experience, but it can also be very intimidating. So before you jump into the home buying process, it may help you to know some basics. Here are the first five steps you should take!
Clean up your credit score.
Your credit score will be reviewed by lenders, so before considering buying your first home, make sure it’s as high as possible. Pay off credit card debt, make sure you’re making payments on time, and make sure to stay below 30% of your total credit card limit for favorable credit scoring. (Learn more here.)
Commit to a savings plan.
Start setting aside money from every paycheck now. Committing to a savings plan now will help you save enough money for a down payment and pay other expenses you’ll incur with a new home!
Find out what you qualify for.
Before you start the journey of looking for your first house, find out the loan amount for which you qualify. This will allow you to have realistic expectations of what you can afford to spend.
Set your own budget.
Although you may qualify for $150,000, that doesn’t mean you should look for a house with that price tag. Live within your means and set a realistic budget for what you can afford. Don't forget to consider your other living expenses, including homeowner's insurance and more than likely higher utility bills, such as water and electricity.
Define exactly what you want in a new house.
Make a wish list of what you want and need in a home so when you meet with a real estate agent, you’re not wasting time looking at houses that don’t meet your needs or budget. This will also help you stay realistic in the house shopping process and eliminate a purchase based solely on emotion.
Have questions? We have answers! Get a free consultation with one of our experienced home loan professionals. We’ll answer any questions and address any concerns you may have about purchasing your first home. Don’t worry if you’re just getting started, we’re simply here to help. There are no up-front obligations or commitments. Or if you're not quite ready for a consultation, subscribe to our blog series, The Path to Ownership, to get the tips and terms you should know to buy your first home.
Lincoln Savings Bank, Member FDIC. Equal housing lender.
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